News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: -0.05% 🇪🇺EUR: -0.08% 🇨🇭CHF: -0.09% 🇬🇧GBP: -0.10% 🇳🇿NZD: -0.15% 🇦🇺AUD: -0.24% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/qg8lDU6XuV
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.31%, while traders in France 40 are at opposite extremes with 79.00%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/EsqtfdT2RE
  • - Will take action if needed - GDP will contract in Q3 - Outlook in near term is uncertain - BBG
  • RBA: - Further major virus outbreaks resulting in lockdowns would delay recovery - BBG
  • The Australian Dollar may face swelling selling pressure from souring risk appetite over the COVID-19 delta variant and escalating tension with China. Get your $AUD markt update from @ZabelinDimitri here:https://t.co/Vy81GwhvzP https://t.co/Z7rI98Ggej
  • Heads Up:🇦🇺 RBA Statement on Monetary Policy due at 01:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-08-06
  • Nasdaq 100 Hits All-Time High, Lifting Nikkei 225 and ASX 200 https://www.dailyfx.com/forex/market_alert/2021/08/06/Nasdaq-100-Hits-All-Time-High-Lifting-Nikkei-225-and-ASX-200-.html https://t.co/Do714faHuq
  • - Stopping currency appreciation is one aim of QE - BBG
  • RBA's Lowe: Not targeting exchange rate, but don't want it going up $AUDUSD
  • Natural gas continues to look higher, as hot weather and drought conditions across the United States and Europe, help fuel the already strong demand narrative for the commodity. Get your market update from @FxWestwater here:https://t.co/n1iT64aBM4 https://t.co/RddL3wYcdq
Fed Hikes, BoJ Intervention, SPX Slip - All Focus on Brexit

Fed Hikes, BoJ Intervention, SPX Slip - All Focus on Brexit

John Kicklighter, Chief Strategist

Talking Points:

  • The past week showed the range of monetary policy was converging into a state of uncertainty and foreign focus
  • Thursday's Brexit vote is seen as a global event in a market that is not considered particularly durable
  • Trading should focus on reducing risk and shifting to a short-term and tactical approach

Having trouble trading in the FX markets? This may be why.

This past week made crystal clear that the world is focused on the upcoming EU Referendum vote. Besides the astronomical jump in GBP/USD implied (expected) volatility and erratic intraday swings, we have seen disconnected markets and fundamental themes pulled into the gravity of this European risk. A range of monetary policy decision - from the hawkish Fed to the extremely dovish BoJ - all turned the focus on the situation in the UK. Meanwhile, markets across asset type and region have shown a clear risk premium associated to the Brexit. Scope is clear, but will the fuse be lit?

Assessing the market's concern over the impending vote, the weight of the risk is spreading progressively further and further out. The Cable's one-week implied volatility level has soared to nearly 50. For context, that is nearly twice the peak see during the Great Financial Crisis. Further out, EUR/USD and USD/JPY have similarly experienced swells in expected volatility - the first from the existential risk posed to the Euro-area and the second reflecting the general risk implications. Short-term volatility for the entire FX market has hit a seven-and-half-year high while the tail risk in US equities (measured through the SKEW index) has risen to levels comparable to January's and August's plunge.

There is considerable event risk scheduled for the week ahead including Fed Chairwoman Janet Yellen's testimony on monetary policy before Congress. However, its influence will be defined by what happens late in the week with the Brexit vote. A hawkish tone by Janet Yellen could immediately be crushed by a vote to leave. Or, a risk move in equities and other sensitive assets to extend the multi-month, multi-year and even record highs would be turned with extreme prejudice. The fundamental evaluation for the week ahead is 'easier', but the focus breaks down technical and fundamental strategy. We consider trading conditions and risks in the week ahead in this weekend Trading Video.

To receive John’s analysis directly via email, please SIGN UP HERE

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES